How To Organize A Growing Security Integrator?

John Honovich

A member asked about "putting together an organizational structure that works for a rapidly growing company."

I wanted to use this discussion to share thoughts and compare notes of how different people have handled this.

I'll go first.

When I was a GM of an integrator, we tripled revenue in 3 years so we dealt with a lot of growing pains.

Dealing With Owner / Family

Often, the owner (or owners) of an integrator are strong in a single area but weak in others (whether it's sales or tech focused).

Given that they are unlikely to leave, the structure needs to be developed to accommodate and compliment them, as best you can.

Promoting (or Not) Existing Employees

Many times you have solid techs or individual sales people who have extensive experience with the company,but lack the interest or temperament to be managers. Be careful about promoting these people as it can degrade their individual performance and screw things up for the people who work for them.

Bringing In New Managers

You will need to bring in new managers or senior people to add skills / expertise that the current team does not have. This can blow up, especially if they don't know security integration well (like bringing in a hot shot telecom salesman or an expert DBA) as it will take them a while to learn your business all the while irritating the people below them who know more about their jobs.

Specializations / Groups

Small integrators tend to have work in a variety of roles - the sales guy is the project manager and he might even help to install / configure things onsite, whether it be a retail job or industrial, etc.

As integrators grow, it is better to start splitting people into more clearly defined functional roles as well as teams, so that they can get very good at what they do.

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Brian Rhodes

Through experience, I do not think it is wise for the salesperson to also be the engineer and/or also project manager.

In a perfect situation, these are three distinct jobs. In small firms, they might be able to multi-task, ie: sales also does marketing, engineer also install work, project manager does accounting.

However, hanging the responsibility on a salesman to not only go out and kill an elephant, but also to cut it up, cook it, hand it out, and clean up afterward will greatly slow them down, keep revenue down, and likely create big mistakes in sensitive areas like cost control or operations management.

Free salespeople to call millions of prospects, visit current customers, and work on details outside of operations.

Assign engineers to keep salespeople from saying 'yes' too much, to remember all the weird specific details no salesperson remembers, and to be the 'bad cop' that allows the salesperson to always remain on the customer's side.

Good Project management is the difference between profit and loss on just about every job. An experienced PM is like an NCO in the military; they tell the grunts when/where to point the rifles, but also keep the bigger goals of victory in mind. PMs must be part of any scaled business plan.

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John Honovich

The tricky part is that a good PM will typically be a mediocre engineer while excellent engineers often make terrible PMs.

I found that the temperaments were different. The best PM hire I made was when I hired these 2 guys out of college who were friends. One was clearly far stronger on technically skills and he did well in an engineering role. However, the other one, who was solid, but not exceptionally technical, became an excellent project manager. What made him so good was that he was very organized (it wasn't taught, it was just how he was) and had a very even temperament. This made him very effective working and coordinating with lots of people from sales to engineering to customers.

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Undisclosed Integrator #1

I have to strongly agree with Brian (and John as well) on all of his points, but most importantly that engineering and sales should be separate. I strongly advocate separating sales and engineering.

Like Brian, I too have seen the effect of mixing sales and engineering many times. On paper it sounds like a good idea: generate technically proficient sales people, have them engineer/estimate their own projects, and you have just condensed your payroll substantially. What you typically end up with is either a poor engineer who can sell well or a poor sales person who is a fantastic engineer. This limits what this person is most effective at by dragging them down with items they are not proficient in.

Mixing sales and engineering is a recipe for disaster IMO. Eventually the company de-evolves from a company selling product into a company that is just servicing legacy engineering disasters until the warranty expires. Alternately, the really proficient techs will burn out as they remedy engineering mistakes in the field on a constant basis.

In my opinion a growing effective company in the integration industry will target the following roles. Too much beyond this is just generating fancy titles.

Executive management

Sales personnel (also marketing)

Accounting personnel

Engineering -- Ideally the engineer should be the person that is making everything work together by cleaning up estimates, field remedies, supporting technicians, etc.

Estimation -- Determines and haggles the cost of product down to arrive at a COST of the project. Sales and/or management determines the margin. This role is frequently merged with engineering.

Project Management -- Adequately covered by Brian above.

Operations/service -- This role is different than project management but this seems to be the most common misconception. Projects are unique, have a finite end, and produce a finished product or fail. Operations tasks are items like staffing, service calls, and other repetitive, recurring tasks.

Technicians -- This one is obvious but it cannot be said enough that nothing happens without these folks. A good one is hard to find and even harder to keep.

Service technicians -- These personnel allow the techs to focus on items which generate significant revenue while avoiding being entangled in "putting out fires".

As a small company it would need to have enough budget available to fulfill those roles so I would prioritize if the budget is not available. I would start with sales, engineering, accounting, and techs. Project management would be next on my list with operations, service techs, and estimation roles being items I would add as the company grows and has the need to turn out more estimates/bids, service work, etc.

Finally, to conclude my filibuster, I would recommend looking at software and processes to tie together the company as a whole from A to Z. If not done already, this would be one of the first purchases I would recommend. The longer no unified software or processes are in place the harder this knot becomes to untangle. Thousands of Excel spreadsheets and manual data re-entry into many different systems does not equal success.

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Undisclosed Integrator #2

What is the Average Compensation and or compensation plan for the Engineer?

Is the engineer designing the jobs the consultants bring in as well as creating the estimates or only checking the design and engineering of the estimate during the estimate building process? With the consultant doing the front end work...

For question #2, when you say consultant to do you mean sales person or do you mean a third party consultant / A&E firm? It sounds like you mean the former (sales person) but consultant is often used to refer to outsiders.

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Undisclosed Integrator #1

1. I can't say a certain dollar amount but I do know IPVM has studies available which are fairly accurate with some adjustment for your region. I know that in the past I was compensated a base salary plus a small percentage for every project I designed based on the final gross margin. I also received an even smaller part of that up front upon contract award.

2. All of the above. If you feel confident in your consultants ability to generate a reasonable estimate then the engineer can be used only for validation. No matter how confident you may be in your consultants abilities I advocate having engineering verify everything above a certain dollar value you set that goes out the door. I would recommend an engineer generate every thing and the consultant validates, but your mileage may vary. It does free up the engineer some to focus on field engineering, programming, and other tasks they are uniquely suited for. Partly, many companies designate an estimator for the cost determination side of engineering and hire a field engineer to fine tune things in the field. You will figure out which works best for your team.

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Undisclosed Integrator #3

I totally agree with you on the engineer part. Organizations with a large number of sales representatives or those that work on larger complex projects would do well to employ a "sales engineer" dedicated to assisting the sales team from a technical standpoint with system layout, equipment selection and proposal generation. This is probably the guy who's a great engineer and an average (at best) salesman. (Full disclosure: I was a design engineer that was tired of running AutoCAD and estimating software all day and went into sales for the money and struggled at it, spent most of his time helping the other sales staff, and discovered he was a better sales engineer than a sales rep.)

I disagree that a PM is an NCO. The guy on the front line telling the grunts where to point their rifles should be a superintendent or a working foreman that reports directly to the PM. Unless it is one really large project, most PM's are managing multiple (literally dozens) of projects. A PM's primary function is dealing with project schedules, procurement, change orders, compliance issues, job cost accounting and most importantly making sure the pay requests and invoices go out properly and on time in order to get paid. The PM is not an NCO, he's the company commander.

A suggestion I can offer to anyone growing an integration company:

1. Be prepared to invest in personnel, training and resources, this won't be easy or cheap.

2. Hire experienced quality people and pay them a better than average wages. Don't be afraid of hiring quality leadership from the outside over propmoting long-term employees, take caution not to make some other company's disgruntled managment your disgruntled management. Know up front your best tech won't necessarily be a good service manager, your best salesman will likely be a poor general manager. When adding new installers or technicians, hire for attitude and train for skill - skill can be taught, attitude is inherent and can seldom be changed.

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